Land-tax system could be extended

The government is inclined to extend the temporary measure of halving the land-value incremental tax rates for another year, Finance Minister Lin Chuan (林全) said yesterday.

Lin said the government's proposal to permanently lower land-value incremental tax rates may not receive legislative approval by the end of this month.

"There's not enough time for the [current] legislature, which has its last session on Jan. 21, to review and finalize the tax-cut proposal," Lin told reporters yesterday.

Last month, the Executive Yuan submitted the proposal to cut the rate of the top tax bracket from 60 percent to 40 percent for legislative review, which left the law-making body less than one month to complete amendments to the Land Tax Law (土地稅法).

But Lin yesterday vowed not to return to the original land tax brackets, set at 60 percent, 40 percent and 20 percent in February, after the current reduction measure expires at the end of this month.

As a measure to boost the slumping property market, the legislature had agreed to temporarily halve the land tax for a year, taking effect in January last year.

"If the amendments fail to be passed, [we will] resort to inter-party negotiations and propose extending the temporary reduction measure for another year," Lin said.

Lin admitted that no consensus has been reached on either the temporary measure or the permanent land-tax cut amendments.

"We hope the land tax system won't return to the previous rates in February, which will have a negative impact on the local property market," Lin said.

"We will therefore try our best to see the temporary measure passed, during inter-party negotiations if necessary," he added.

Lin said that if both proposals are killed in the legislature, the finance ministry will not rule out the possibility of enacting a retroactive clause into its land-tax law amendments to include a tax rebate.

According to the ministry's taxation department, a grace period of 30 days will be given to land-tax applicants to receive the halved rates after the temporary reduction measure expires on Jan. 31.